New Jersey Senate Passes Tax Bill, Ending Impasse

By RONALD SMOTHERS

Published: February 7, 2007

The New Jersey Senate found itself in an unenviable spot on Tuesday morning.

The Senate president, Richard J. Codey, declared that he would keep his colleagues in session from 11 in the morning to 11 at night, through the weekend, until they passed a property tax bill supported by the governor and Democratic legislative leaders. The measure would, among other things, give 95 percent of all property owners in the state up to a 20 percent tax credit and limit increases in local property taxes to 4 percent.

Gov. Jon S. Corzine and the state treasurer, Bradley I. Abelow, had already begun summoning leading legislators -- Democrats and Republicans alike -- to the governor's office during a late-night session Monday when the bill stalled, and called them in again on Tuesday morning. They showed the lawmakers the numbers -- just how many homeowners in their districts would benefit from the tax credits.

Yet implied in these exchanges was much more than the inconvenience of being chained to their desks in the Senate chamber for the rest of the week. The message was that the governor and Democratic leaders would make sure that any ''no'' votes would be widely publicized in their districts in this election year.

The tag team of the governor and the Senate president succeeded when the Senate -- just an hour after Mr. Codey's warning and five minutes after Governor Corzine met with State Senator Robert W. Singer, a Republican from Jackson Township -- voted 28 to 10 to approve the measure. Mr. Singer had relented, and other Republicans joined him in voting for it.

''This was a test of wills and the people won,'' Mr. Codey said, smiling broadly after the sudden reversal of the bill's fortunes. ''I knew we would eventually win.''

At a news conference later in the day, Governor Corzine called the passage of the measure a ''bipartisan victory,'' and added that showing lawmakers how many households would receive the tax credits was indeed persuasive. ''It is very easy to look at the numbers and wonder why someone would not vote for this,'' he said.

The dramatic vote on the measure, which sailed through the Democratic-controlled Assembly last week, sent the bill to Governor Corzine. He is expected to sign it, along with a half-dozen other bills that together form the heart of the property tax relief program.

The measures provide the $2.2 billion tax credit program, impose a 4 percent cap on annual increases in local property taxes, create the office of an appointed comptroller to try to ferret out waste and fraud at all levels of government, and institute changes intended to lower state and local governments' pension burdens.

Tuesday's events capped two tense days during what was expected to be a routine vote on the cornerstone of the property tax plan. The situation turned into a battle after four Democrats who were expected to support the measure withdrew their support.

Mr. Singer, fresh from his meeting with Governor Corzine, explained that he initially withheld his support because he agreed with the four Democrats who had complained that the bill's caps on local property tax levies were too porous to provide any real spending restrictions on municipalities and school districts and because the measure denied relief to households with incomes over $250,000 a year. He said he thought that provision might be unconstitutional.

The Democratic holdouts, as well as many Republicans, also argued that the package, while providing for credits in this election year, did not guarantee that money for them would be available in future years.

But earlier Tuesday morning, Mr. Singer said, as he was working out at a gym in Howell Township, he encountered friends and voters who repeatedly asked if they were going to get their tax credits. When Governor Corzine later showed him how many people in his district -- many of them elderly and retired people living on fixed incomes of less than $100,000 a year -- would be affected, he said, he changed his mind.

''It showed that my district gets the lion's share of the 20 percent credit,'' he said. "I can't say no to them and provide no relief this year just because we have no certainty about next year. We'll deal with next year when next year comes."

The bill provides that households with incomes of less than $100,000 a year would receive the maximum credit, 20 percent; those with incomes of $100,000 to $150,000 would get 15 percent; and those with annual incomes of $150,000 to $250,000 would get 10 percent.

Senator Nia Gill of Montclair, one of the four Democrats who refused to approve the measure on Monday, continued to criticize it after the vote. She maintained that denying credits to households earning more than $250,000 a year was unconstitutional, even though the state attorney general, Stuart Rabner -- when queried by Republicans -- said last Friday that the measure's formula was constitutional.

The three other Democratic senators who opposed the measure were John Adler of Cherry Hill; Shirley Turner, whose district incorporates poor areas of Mercer County as well as wealthy areas like Princeton; and Wayne Bryant of Camden.

Photo: Gov. Jon S. Corzine spoke after the State Senate passed a bill he wanted, approving property tax credits. ''The people won,'' he said. (Photo by Colin Archer for The New York Times)